Growing Talent and Sales at McCormick

Training & Development, Jul 2007 by Bingham, Tony, Galagan, Pat

At C Level: Robert J. Lawless

Chairman and CEO

SUCCESSION PLANNING ACROSS ALL LEVELS OF THE COMPANY SPAWNS LEADERSHIP DEVELOPMENT.

A sign on Bob Lawless's desk says "The puck stops here."

A few decades after playing competitive hockey in Canada, Lawless is still a recreational hockey player. Although he admits to having slowed down a bit, he still thinks he can beat a younger employee who has challenged him to a 100-meter dash. She thinks she will beat him; he's sure she won't.

That confidence in the face of a challenge characterizes Lawless's approach to leading the 7,200 employees of McCormick & Company, the 119-year-old purveyor of spices and flavorings to food manufacturers, restaurant businesses, and grocery stores around the world. McCormick had a tough year in 2005 when Hurricane Katrina and a collapsing market for vanilla took their toll, but during Lawless's tenure as chairman and CEO, the company's recovery has been remarkably strong. Net sales and the gross profit margin both increased in 2006, and the company expects to increase sales by 4 percent in 2007. T D talked with Lawless about how the company's learning efforts support its key strategies.

Q McCormick has ambitious growth plans for 2007. How does employee development support these strategic goals?

A One key area is a leadership development program known as multiple management boards, or MMB. It's an action learning program that combines developing talent with achieving actual company goals. McCormick has been operating the program for 75 years, and it is unique. The people in the MMB group learn how to lead while working on projects for the company around the globe.

I believe learning is part of what makes a person successful at McCormick.

Q What are the company's key strategies?

A We have only four main strategies: to grow our sales, innovate, and manage our cost base. The fourth one, which supersedes everything, is succession planning. Part of my compensation every year is based on having a robust succession plan with good development goals for my direct reports and their direct reports. Every year, our board asks how succession planning is linked to how we're growing as a company. So it's something we pay attention to.

I've been working on a succession plan for myself because at some point I will retire. My view is that world-class companies develop their own talent. And if we have a company that's running well, we can develop our own talent. We have committed to our employees that provided they get the appropriate training and development, they can become successors to all the leaders in this company.

All company presidents worldwide have come from within. We have sent some of them to work in Canada. It's our training and development ground because it's a microcosm of McCormick worldwide. It radiates our culture.

We believe that by having a process whereby we can grow our people internally, we're going to end up with a competitive advantage. The only way we can do that is to give them opportunities to grow their careers. We have to challenge them and allow them to learn and develop. If we don't, they're going to leave and find a company that gives them the tools for advancement.

I see learning and development, along with career growth, as part of the succession planning process. These days, nobody comes from a college or university with the tools to be a CEO or executive vice president of finance. They come with intellectual ability but not the tools. That's why we created learning centers and a network of learning and development professionals.

Q What do you look for in future leaders?

A At the top level there are five criteria. Number one, can the person understand and fit into the culture and lead here? McCormick is a family company, and it's very unique. When I became CEO back in 1996,1 was kidding around in a meeting saying, "I'm the CEO." And some people said "Not yet!" They wanted me to understand that I'd been appointed but they hadn't endorsed me yet. That's the culture we live in.

second is the ability to lead and get out in front. Leaders shouldn't be afraid to make tough decisions fast. You can't be liked all the time.

The third thing leaders here have to understand is that we're all equal at McCormick. You've got to treat people fairly.

The fourth thing we look for in a leader is an understanding that we cater to the shareholders and the employees. I read about CEOs who say "I'm here for the shareholders." I'm here for the shareholders too, but if our people don't grow, develop, and learn, and if we don't appreciate them, I won't have the job of serving the shareholders. Employees are the people who make a difference.

The people in our organization are more important to me than shareholders. And I believe they know that. That's very unique. I can tell you story after story about how, in a crisis situation, we're the best company in the world.

The fifth criterion for leadership is an understanding that we must maintain a competitive advantage in the marketplace. That means we have to make tough business decisions and tough decisions about product categories and overall innovation. So there's a little bit of tough love required for leadership at McCormick.